- Last Will and Testament bequests – by far the simplest way to include charitable gifts in your estate plan is by making direct bequests in your Last Will and Testament. This allows you to make an outright gift to as many charitable endeavors as you wish. While this option is simple and straightforward, there are some drawbacks to making gifts in you Will. Gifts made in your Will count toward the total value of your estate assets because the assets were still owned by you at the time of death. Therefore, the value of the gift(s) is potential subject to federal gift and estate taxation. You also lose the potential tax benefits of making a charitable gift during your lifetime. In addition, when you make an outright gift in your Will you have no control over how the assets are ultimately used.
- Annual gifts – each taxpayer is entitled to gift assets valued at up to $14,000 to an unlimited number of beneficiaries each year tax free. The value of the gift is not subject to federal gift and estate taxes nor does the value of the gift count toward your lifetime exemption limit for gift and estate tax purposes.
- Charitable trusts – charitable trusts offer a number of benefits that direct gifts do not. One benefit is the amount of control you retain over how the gift is used by using the trust terms. A charitable trust can be established that makes gifts to a charity only or you may wish to create a charitable lead or charitable remainder trust which will allow you to gift to both a charitable and a non-charitable beneficiary. A charitable lead trust distributes trust assets in a specific amount and/or for a specific period of time to a charitable beneficiary with the remainder going to a non-charitable beneficiary while a charitable remainder trust gifts first to a non-charitable beneficiary with the remainder to a charitable beneficiary.
If you have additional questions or concerns about how you can include charitable gifting in your estate plan, contact the experienced New York estate planning attorneys at The Law Offices of Saul Kobrick, P.C. by calling 800-295-1917 to schedule your appointment.